Figure 15-1 Price Level ON OB to point D B to point C B to point A O A to point C D SRAS₂ AD1 SRASI AD2 Real GDP Refer to Figure 15-1. One argument against the use of activist monetary policy claims that it can destabilize the economy. For example, suppose we are in a recessionary gap. Expansionary monetary policy is implemented, but there are so many lags that by the time it has its effect, self-regulation has already closed the gap by itself. The end result is a movement from point

Which of the following scenarios below BEST matches an inflationary monetary policy aka a “loose money” policy?   a.Buying bonds increases the money supply, which lowers the interest rate b.Increasing taxes increases the reserve requirements, which decreases investment c.Increasing the discount rate lowers the real interest rate, which raises investment d.Selling bonds decreases the money supply which increases the interest rate e.Decreasing government spending lowers the interest rate, which lowers consumption

What is a monetary rule?  What is its purpose? Illustrate and explain the implementation of a monetary rule.

How do changes in interest rates impact consumer spending, business investment, and overall economic activity, and how does the central bank use interest rates as a tool of monetary policy? A) Changes in interest rates have no effect on economic activity. B) Lower interest rates typically encourage consumer borrowing and business investment, stimulating economic activity. The central bank uses interest rate adjustments as a tool to influence borrowing and spending. C) Higher interest rates boost economic activity by increasing consumer savings. D) Changes in interest rates only affect government spending.

Why do Keynesian economics believe increasing the money supply is a good idea? Use the equation of exchange in this answer.

The answer choices for the blanks are Blank 1: fall, remain the same, rise Blank 2: remain the same, rise, decline Blank 3: international trade, real balance, interest-rate

An example of a tight monetary policy is

"If a central bank's desired intermediate target is a monetary aggregate (money supply), then its policy instrument will most likely be a reserve aggregate variable like the monetary base." Explain this based on the conduct of monetary policy in practice.

what is a fiscal policy  what is a monetary policy -give an example in todays economy. thanks for your time

How does the federal government reduce interest rate? What happens to interest rate and quantity of money as a result of expansionary monetary policy? Please explain using a diagram of interest rates vs quantity of money. showing the relevant shifts in the supply and demand curve.